Uber is burning through $1 billion a year in China
Uber is losing $1 billion per year to compete in China, as it looks to gain a foothold in the massive market and compete against the ride-sharing leader in the region.
"We're profitable in the USA, but we're losing over $1 billion a year in China," Uber's CEO Travis Kalanick told Canadian technology platform Betakit, according to Reuters.
"We have a fierce competitor that's unprofitable in every city they exist in, but they're buying up market share. I wish the world wasn't that way," Kalanick continued.
To fight off competition, China's Didi Kuaidi, backed by bigwigs Tencent Holdings and Alibaba Group, heavily subsidize rides in China to attract users.
Even with the loss, Uber's China unit was recently valued at $8 billion after it raised $1 billion in funding. Didi Kuaidi recently rose $3 billion in its last funding round in September, giving it a valuation of around $16.5 billion.
"I think there is this thinking that, '[Uber] expanded to Australia, Singapore and Hong Kong and it should just all work, no problem,' " said Tarr. "China is such a different animal in terms of dealing with the local culture, the protectionism and the fact that you don't have local investors," said Greg Tarr, partner at CrossPacific Capital.
We've reached out to Uber for more details on the financial figures.